-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, SrHpfsgRqryI7XzYWSlMN3FHo9aW849P6WoDyDHTlOuZQuJ55hICryTYSkZ/Oh5M bwZx64LvLicTX0R2T8eShA== 0000925178-05-000012.txt : 20051021 0000925178-05-000012.hdr.sgml : 20051021 20051020195528 ACCESSION NUMBER: 0000925178-05-000012 CONFORMED SUBMISSION TYPE: 8-K PUBLIC DOCUMENT COUNT: 5 CONFORMED PERIOD OF REPORT: 20050609 ITEM INFORMATION: Entry into a Material Definitive Agreement ITEM INFORMATION: Financial Statements and Exhibits FILED AS OF DATE: 20051021 DATE AS OF CHANGE: 20051020 FILER: COMPANY DATA: COMPANY CONFORMED NAME: MOVIE GALLERY INC CENTRAL INDEX KEY: 0000925178 STANDARD INDUSTRIAL CLASSIFICATION: SERVICES-VIDEO TAPE RENTAL [7841] IRS NUMBER: 631120122 STATE OF INCORPORATION: DE FISCAL YEAR END: 0103 FILING VALUES: FORM TYPE: 8-K SEC ACT: 1934 Act SEC FILE NUMBER: 000-24548 FILM NUMBER: 051148242 BUSINESS ADDRESS: STREET 1: 900 WEST MAIN STREET CITY: DOTHAN STATE: AL ZIP: 36301 BUSINESS PHONE: 3346772108 MAIL ADDRESS: STREET 1: 900 WEST MAIN STREET CITY: DOTHAN STATE: AL ZIP: 36301 8-K 1 r8k-1019.txt CURRENT REPORT UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 8-K CURRENT REPORT Pursuant to Section 13 OR 15(d) of The Securities Exchange Act of 1934 Date of Report (Date of earliest event reported) June 9, 2005 MOVIE GALLERY, INC. (Exact name of registrant as specified in its charter) Delaware 0-24548 63-1120122 (State or Other Jurisdiction (Commission (IRS Employer of Incorporation) File Number) Identification No.) 900 West Main Street Dothan, Alabama 36301 (Address of principal executive offices) (Zip Code) Registrant's telephone number, including area code (334) 677-2108 ------------------------------------------------------------- (Former name or former address, if changed since last report) Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions: [ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425) [ ] Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12) [ ] Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b)) [ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c)) ITEM 1.01 ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT. On March 25, June 9 and June 22, 2005, the Compensation Committee of the Board of Directors of Movie Gallery, Inc. (the "Company") awarded shares of restricted stock to certain of the Company's executive officers and directors. These awards, which were previously reported on Form 4s, were made pursuant to and subject to the provisions of the Movie Gallery, Inc. 2003 Stock Plan, as amended. The purpose of this 8-K Report is to file the forms of Restricted Stock Purchase Agreement evidencing such awards. On March 25, 2005, the following executive officers each received a grant of restricted stock: Number Name Title of Shares - ------------------- ---------------------------------- ----------- Joe T. Malugen Chairman of the Board, President 25,000 and Chief Executive Officer Harrison H. Parrish Vice Chairman of the Board and 11,668 Senior Vice President S. Page Todd Executive Vice President, 10,000 Secretary, General Counsel, and Chief Compliance Officer Jeffrey S. Stubbs Executive Vice President and Chief 10,000 Operating Officer - Movie Gallery US, Inc. Mark S. Loyd Executive Vice President, Product 10,000 and Distribution and Chief Administrative Officer - Movie Gallery US, Inc. Keith A. Cousins Executive Vice President - 10,000 Development Thomas D. Johnson Senior Vice President - Corporate 5,000 Finance and Business Development Ivy M. Jernigan Senior Vice President and Chief 6,668 Financial Officer - Movie Gallery US, Inc.(1) Michelle Lewis Senior Vice President and 5,000 Treasurer - Movie Gallery US, Inc.(2) (1) At the time of grant, Ms. Jernigan was Senior Vice President and Chief Financial Officer of the Company. (2) At the time of grant, Ms. Lewis was Senior Vice President and Treasurer of the Company. These restricted shares will vest as to 25% of the shares on each of the first four anniversaries of the grant date, or earlier upon termination of the executive's employment due to death. The form of Restricted Stock Purchase Agreement used for these service-based vesting awards is filed as Exhibit 10.1 to this Form 8-K and incorporated by reference herein. Also on March 25, 2005, the Company's non-employee directors, John J. Jump, James C. Lockwood and William B. Snow, each received a grant of 3,333 shares of restricted stock, 100% of which will vest one year from the date of grant. On June 9, 2005, Messrs. Jump, Lockwood and Snow also each received an additional grant of 3,000 shares of restricted stock, 100% of which will vest one year from the date of grant. The form of Restricted Stock Purchase Agreement for these non-employee director awards is filed as Exhibit 10.2 to this Form 8-K and incorporated by reference herein. On June 9, 2005, the following executive officers, each of whom joined the Company as a result of its acquisition of Hollywood Entertainment Corporation ("Hollywood") and became executive officers of the Company on June 22, 2005, received a grant of restricted stock: Number Name Title of Shares - -------------------- ---------------------------------- ----------- Timothy R. Price Executive Vice President and Chief 10,000 Financial Officer Silvio D. Piccini Executive Vice President and Chief 10,000 Marketing Officer - Hollywood Lawrence E. Plotnick Executive Vice President and Chief 10,000 Operating Officer - Hollywood These restricted shares will vest as to 25% of the shares on each of the first four anniversaries of the grant date, or earlier upon termination of the executive's employment due to death. The form of Restricted Stock Purchase Agreement used for these service-based vesting awards is filed as Exhibit 10.1 to this Form 8-K and incorporated by reference herein. Also on June 9, 2005, Mr. Malugen received a grant of 10,000 shares of restricted stock and Mr. Parrish received a grant of 3,000 shares of restricted stock. These restricted shares will vest upon the attainment of specific Company performance objectives relating to the integration of Hollywood by the end of the Company's 2005 fiscal year. The shares of restricted stock will vest in full upon the executive officer's death. The form of Restricted Stock Purchase Agreement for these one-year performance-based vesting awards is filed as Exhibit 10.3 to this Form 8-K and incorporated by reference herein. Also on this date, Messrs. Todd, Stubbs, Loyd, Cousins, and Johnson and Ms. Jernigan and Ms. Lewis each received a grant of 6,250 shares of restricted stock, and on September 22, 2005, Messrs. Price, Piccini and Plotnick each received a grant of 6,250 shares of restricted stock. With respect to these awards, 50% of the shares will vest upon the attainment of specific Company performance objectives relating to the integration of Hollywood by the end of the Company's 2005 fiscal year and 50% of the shares will vest upon the attainment of specific Company performance objectives relating to the integration of Hollywood by the end of the Company's 2006 fiscal year. The shares of restricted stock will vest in full upon the executive officer's death. The form of Restricted Stock Purchase Agreement used for these two-year performance-based vesting awards is filed as Exhibit 10.4 to this Form 8-K and incorporated by reference herein. ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS (c) Exhibits 10.1 Form of Employee Restricted Stock Purchase Agreement (service- based vesting for employees) 10.2 Form of Non-Employee Director Restricted Stock Purchase Agreement (for non-employee directors) 10.3 Form of Employee Restricted Stock Purchase Agreement (one-year performance based vesting for employees) 10.4 Form of Employee Restricted Stock Purchase Agreement (two-year performance based vesting for employees) SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. MOVIE GALLERY, INC. Date: October 20, 2005 /S/ S. Page Todd - ---------------------------- S. Page Todd Executive Vice President, Secretary, General Counsel and Chief Compliance Officer INDEX TO EXHIBITS 10.1 Form of Employee Restricted Stock Purchase Agreement (service- based vesting for employees) 10.2 Form of Non-Employee Director Restricted Stock Purchase Agreement (for non-employee directors) 10.3 Form of Employee Restricted Stock Purchase Agreement (one-year performance based vesting for employees) 10.4 Form of Employee Restricted Stock Purchase Agreement (two-year performance based vesting for employees) EX-10 2 ex101.txt EXHIBIT 10.1 Employee R E S T R I C T E D S T O C K P U R C H A S E A G R E E M E N T Non-transferable GRANT TO ---------------- ("Grantee") by Movie Gallery, Inc. (the "Corporation") of shares of its common stock, $0.001 par value (the "Shares") - ---------- pursuant to and subject to the provisions of the Movie Gallery, Inc. 2003 Stock Plan, as amended, and to the terms and conditions set forth on the following page (the "Terms and Conditions"). By accepting the Shares, Grantee shall be deemed to have agreed to the terms and conditions set forth in this Agreement and the Plan. Unless vesting is accelerated in accordance with the Plan or in the discretion of the Board or the Committee, the Shares will vest (become non- forfeitable) in accordance with the following schedule: Continuous Employment after the Grant Date Percent of Vested Shares ------------------------- ---------------------------- One year 25% Two years 50% Three years 75% Four years 100% IN WITNESS WHEREOF, Movie Gallery, Inc., acting by and through its duly authorized officers, has caused this Agreement to be executed as of the Grant Date. MOVIE GALLERY, INC. By: --------------------------------------------- Accepted by: ------------------------------------ Grant Date: ------------------------------------- TERMS AND CONDITIONS 1. Grant of Shares. The Corporation hereby grants to the Grantee named on page 1 hereof, subject to the restrictions and the other terms and conditions set forth in the Plan and in this Agreement, the number of shares indicated on page 1 hereof of the Corporation's $0.001 par value common stock (the "Shares"). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. 2. Restrictions. The Shares are subject to each of the following restrictions. "Restricted Shares" mean those Shares that are subject to the restrictions imposed hereunder which restrictions have not then expired or terminated. Restricted Shares may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered. If Grantee's employment with the Corporation or any Parent or Subsidiary terminates for any reason other than as set forth in paragraph (b) of Section 3 hereof, then Grantee shall forfeit all of Grantee's right, title and interest in and to the Restricted Shares as of the date of employment termination, and such Restricted Shares shall revert to the Corporation immediately following the event of forfeiture. The restrictions imposed under this Section shall apply to all shares of Common Stock or other securities issued with respect to Restricted Shares hereunder in connection with any merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure affecting the Common Stock. 3. Expiration and Termination of Restrictions. The restrictions imposed under Section 2 will expire on the earliest to occur of the following (the period prior to such expiration being referred to herein as the "Restricted Period"): (a) as to the percentages of the Shares specified on page 1 hereof, on the respective dates specified on page 1 hereof; provided Grantee is then still employed by the Corporation or a Parent or Subsidiary; or (b) as to all of the Shares, the termination of Grantee's employment from the Corporation or a Parent or Subsidiary due to death. 4. Delivery of Shares. The Shares will be registered in the name of Grantee as of the Grant Date and may be held by the Corporation during the Restricted Period in certificated or uncertificated form. If a certificate for Restricted Shares is issued during the Restricted Period, such certificate shall be registered in the name of Grantee and shall bear an appropriate legend reflecting the terms of this Agreement. At the expiration of the Restricted Period, the Corporation shall either, at its discretion, (i) cause a stock certificates for the Shares, without the above legend, to be delivered to Grantee or Grantee's designee, or (ii) deliver the Shares in uncertificated form to a brokerage firm for Grantee's account, without restriction; provided that, in either case, delivery may be postponed for such period as may be required for the Corporation with reasonable diligence to comply, if deemed advisable by the Corporation, with registration requirements under the Securities Act of 1933, listing requirements of any stock exchange, and requirements under any other law or regulation applicable to the issuance or transfer of the Shares. 5. Voting and Dividend Rights. Grantee, as beneficial owner of the Shares, shall have full voting and dividend rights with respect to the Shares during and after the Restricted Period. If Grantee forfeits any rights he may have under this Agreement, Grantee shall no longer have any rights as a stockholder with respect to the Restricted Shares or any interest therein and Grantee shall no longer be entitled to receive dividends on such stock. 6. Changes in Capital Structure. The provisions of the Plan shall apply in the case of a change in the capital structure of the Corporation. 7. No Right of Continued Employment. Nothing in this Agreement shall interfere with or limit in any way the right of the Corporation or any Parent or Subsidiary to terminate Grantee's employment at any time, nor confer upon Grantee any right to continue employment. 8. Payment of Taxes. Grantee will, no later than the date as of which any amount related to the Shares first becomes includable in Grantee's gross income for federal income tax purposes, pay to the Corporation, or make other arrangements satisfactory to the Board or the Committee regarding payment of, any federal, state and local taxes of any kind required by law to be withheld with respect to such amount. The Corporation may, but need not, allow Grantee to satisfy such withholding obligation, in whole or in part, by withholding from the award Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes. The obligations of the Corporation under this Agreement will be conditional on such payment or arrangements, and the Corporation or its Parent or Subsidiaries will, to the extent permitted by law, have the right to deduct any such taxes from the award or any payment of any kind otherwise due to Grantee. 9. Amendment. The Board of the Committee may amend, modify or terminate this Agreement without approval of Grantee; provided, however, that such amendment, modification or termination shall not, without Grantee's consent, reduce or diminish the value of this award determined as if it had been fully vested on the date of such amendment or termination. 10. Plan Controls. The terms contained in the Plan are incorporated into and made a part of this Agreement and this Agreement shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall be controlling and determinative. 11. Notice. Notices under this Agreement must be in writing and either personally delivered or sent by registered or certified US mail, return receipt requested, postage prepaid. Notices to the Corporation must be addressed to Movie Gallery, Inc., 900 West Main Street, Dothan, Alabama 36301: Attn: Secretary, or any other address designated by the Corporation in a written notice to Grantee. Notices to Grantee will be directed to the address of Grantee then currently on file with the Corporation, or at any other address given by Grantee in a written notice to the Corporation. EX-10 3 ex102.txt EXHIBIT 10.2 Non-Employee Director R E S T R I C T E D S T O C K P U R C H A S E A G R E E M E N T Non-transferable GRANT TO ---------------- ("Grantee") by Movie Gallery, Inc. (the "Corporation") of shares of its common stock, $0.001 par value (the "Shares") - ---------- pursuant to and subject to the provisions of the Movie Gallery, Inc. 2003 Stock Plan, as amended, and to the terms and conditions set forth on the following page (the "Terms and Conditions"). By accepting the Shares, Grantee shall be deemed to have agreed to the terms and conditions set forth in this Agreement and the Plan. Unless vesting is accelerated in accordance with the Plan or in the discretion of the Board, the Shares will vest (become non-forfeitable) in accordance with the following schedule: Months of Service as a Director after the Grant Date Percent of Shares Vested ------------------------ ---------------------------- 12 100% IN WITNESS WHEREOF, Movie Gallery, Inc., acting by and through its duly authorized officers, has caused this Agreement to be executed as of the Grant Date. MOVIE GALLERY, INC. By: ------------------------------------- Accepted by: ---------------------------- Grant Date: ----------------------------- TERMS AND CONDITIONS 1. Grant of Shares. The Corporation hereby grants to the Grantee named on page 1 hereof, subject to the restrictions and the other terms and conditions set forth in the Plan and in this Agreement, the number of shares indicated on page 1 hereof of the Corporation's $0.001 par value common stock (the "Shares"). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. 2. Restrictions. The Shares are subject to each of the following restrictions. "Restricted Shares" mean those Shares that are subject to the restrictions imposed hereunder which restrictions have not then expired or terminated. Restricted Shares may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered. If Grantee's service as a member of the Board of the Corporation terminates for any reason before the Shares are vested as provided in Section 3 hereof, then Grantee shall forfeit all of Grantee's right, title and interest in and to the Restricted Shares as of the date of termination of service, and such Restricted Shares shall revert to the Corporation immediately following the event of forfeiture. The restrictions imposed under this Section shall apply to all shares of Common Stock or other securities issued with respect to Restricted Shares hereunder in connection with any merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure affecting the Common Stock. 3. Expiration and Termination of Restrictions. The restrictions imposed under Section 2 will expire as to all of the Shares at earlier of (i) the end of 12 months following the Grant Date, or (ii) a date specified by the Plan or in the discretion of the Board (the period prior to such expiration or vesting being referred to herein as the "Restricted Period"). 4. Delivery of Shares. The Shares will be registered in the name of Grantee as of the Grant Date and may be held by the Corporation during the Restricted Period in certificated or uncertificated form. If a certificate for Restricted Shares is issued during the Restricted Period, such certificate shall be registered in the name of Grantee and shall bear an appropriate legend reflecting the terms of this Agreement. At the expiration of the Restricted Period, the Corporation shall either, at its discretion, (i) cause a stock certificates for the Shares, without the above legend, to be delivered to Grantee or Grantee's designee, or (ii) deliver the Shares in uncertificated form to a brokerage firm for Grantee's account, without restriction; provided that, in either case, delivery may be postponed for such period as may be required for the Corporation with reasonable diligence to comply, if deemed advisable by the Corporation, with registration requirements under the Securities Act of 1933, listing requirements of any stock exchange, and requirements under any other law or regulation applicable to the issuance or transfer of the Shares. 5. Voting and Dividend Rights. Grantee, as beneficial owner of the Shares, shall have full voting and dividend rights with respect to the Shares during and after the Restricted Period. If Grantee forfeits any rights he may have under this Agreement, Grantee shall no longer have any rights as a stockholder with respect to the Restricted Shares or any interest therein and Grantee shall no longer be entitled to receive dividends on such stock. 6. Changes in Capital Structure. The provisions of the Plan shall apply in the case of a change in the capital structure of the Corporation. 7. No Right of Continued Service. Nothing in this Agreement shall interfere with or limit in any way the right of the Corporation to terminate Grantee's service as a member of the Board at any time, nor confer upon Grantee any right to continue such service. 8. Amendment. The Board or the Committee may amend, modify or terminate this Agreement without approval of Grantee; provided, however, that such amendment, modification or termination shall not, without Grantee's consent, reduce or diminish the value of this award determined as if it had been fully vested on the date of such amendment or termination. 9. Plan Controls. The terms contained in the Plan are incorporated into and made a part of this Agreement and this Agreement shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall be controlling and determinative. 10. Notice. Notices under this Agreement must be in writing and either personally delivered or sent by registered or certified US mail, return receipt requested, postage prepaid. Notices to the Corporation must be addressed to Movie Gallery, Inc., 900 West Main Street, Dothan, Alabama 36301: Attn: Secretary, or any other address designated by the Corporation in a written notice to Grantee. Notices to Grantee will be directed to the address of Grantee then currently on file with the Corporation, or at any other address given by Grantee in a written notice to the Corporation. EX-10 4 ex103.txt EXHIBIT 10.3 Employee R E S T R I C T E D S T O C K P U R C H A S E A G R E E M E N T Non-transferable GRANT TO ----------------- ("Grantee") by Movie Gallery, Inc. (the "Corporation") of shares of its common stock, $0.001 par value (the "Shares") - --------- pursuant to and subject to the provisions of the Movie Gallery, Inc. 2003 Stock Plan, as amended, and to the terms and conditions set forth on the following page (the "Terms and Conditions"). By accepting the Shares, Grantee shall be deemed to have agreed to the terms and conditions set forth in this Agreement and the Plan. Unless accelerated in accordance with the Plan or in the discretion of the Board, the Shares will vest (become non-forfeitable) in accordance with the following schedule, provided that Grantee is employed by the Corporation or a Parent or Subsidiary as of such applicable date: Percent of Vesting Date Performance Contingency Shares Vested - ---------------------- --------------------------- ------------- Date Audit Committee $10 million in Synergies* 100% certifies achievement achieved by end of FY 2005 of FY 2005 Performance (January 1, 2006) Contingency * "Synergies" has the meaning outlined in the May 19, 2005 Memorandum to the Compensation Committee and the May 27, 2005 Compensation Committee Minutes, as further outlined and clarified June 9, 2005 Board Minutes. Achievement of the target level of Synergies shall be subject to verification and certification by the Audit Committee of the Board. IN WITNESS WHEREOF, Movie Gallery, Inc., acting by and through its duly authorized officers, has caused this Agreement to be executed as of the Grant Date. MOVIE GALLERY, INC. By: ------------------------------------ Accepted by: --------------------------- Grant Date: ---------------------------- TERMS AND CONDITIONS 1. Grant of Shares. The Corporation hereby grants to the Grantee named on page 1 hereof, subject to the restrictions and the other terms and conditions set forth in the Plan and in this Agreement, the number of shares indicated on page 1 hereof of the Corporation's $0.001 par value common stock (the "Shares"). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. 2. Restrictions. The Shares are subject to each of the following restrictions. "Restricted Shares" mean those Shares that are subject to the restrictions imposed hereunder which restrictions have not then expired or terminated. Restricted Shares may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered. If Grantee's employment with the Corporation or any Parent or Subsidiary terminates for any reason other than as set forth in paragraph (b) of Section 3 hereof, then Grantee shall forfeit all of Grantee's right, title and interest in and to the Restricted Shares as of the date of employment termination, and such Restricted Shares shall revert to the Corporation immediately following the event of forfeiture. The restrictions imposed under this Section shall apply to all shares of Common Stock or other securities issued with respect to Restricted Shares hereunder in connection with any merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure affecting the Common Stock. 3. Expiration and Termination of Restrictions. The restrictions imposed under Section 2 will expire on the earliest to occur of the following (the period prior to such expiration being referred to herein as the "Restricted Period"): (a) as to the percentages of the Shares specified on page 1 hereof, on the respective dates specified on page 1 hereof; provided the performance contingency has been achieved and Grantee is then still employed by the Corporation or a Parent or Subsidiary; or (b) as to all of the Shares, the termination of Grantee's employment from the Corporation or a Parent or Subsidiary due to death. 4. Delivery of Shares. The Shares will be registered in the name of Grantee as of the Grant Date and may be held by the Corporation during the Restricted Period in certificated or uncertificated form. If a certificate for Restricted Shares is issued during the Restricted Period, such certificate shall be registered in the name of Grantee and shall bear an appropriate legend reflecting the terms of this Agreement. At the expiration of the Restricted Period, the Corporation shall either, at its discretion, (i) cause a stock certificates for the Shares, without the above legend, to be delivered to Grantee or Grantee's designee, or (ii) deliver the Shares in uncertificated form to a brokerage firm for Grantee's account, without restriction; provided that, in either case, delivery may be postponed for such period as may be required for the Corporation with reasonable diligence to comply, if deemed advisable by the Corporation, with registration requirements under the Securities Act of 1933, listing requirements of any stock exchange, and requirements under any other law or regulation applicable to the issuance or transfer of the Shares. 5. Voting and Dividend Rights. Grantee, as beneficial owner of the Shares, shall have full voting and dividend rights with respect to the Shares during and after the Restricted Period. If Grantee forfeits any rights he may have under this Agreement, Grantee shall no longer have any rights as a stockholder with respect to the Restricted Shares or any interest therein and Grantee shall no longer be entitled to receive dividends on such stock. 6. Changes in Capital Structure. The provisions of the Plan shall apply in the case of a change in the capital structure of the Corporation. 7. No Right of Continued Employment. Nothing in this Agreement shall interfere with or limit in any way the right of the Corporation or any Parent or Subsidiary to terminate Grantee's employment at any time, nor confer upon Grantee any right to continue employment. 8. Payment of Taxes. Grantee will, no later than the date as of which any amount related to the Shares first becomes includable in Grantee's gross income for federal income tax purposes, pay to the Corporation, or make other arrangements satisfactory to the Board or the Committee regarding payment of, any federal, state and local taxes of any kind required by law to be withheld with respect to such amount. The Corporation may, but need not, allow Grantee to satisfy such withholding obligation, in whole or in part, by withholding from the award Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes. The obligations of the Corporation under this Agreement will be conditional on such payment or arrangements, and the Corporation or its Parent or Subsidiaries will, to the extent permitted by law, have the right to deduct any such taxes from the award or any payment of any kind otherwise due to Grantee. 9. Amendment. The Board of the Committee may amend, modify or terminate this Agreement without approval of Grantee; provided, however, that such amendment, modification or termination shall not, without Grantee's consent, reduce or diminish the value of this award determined as if it had been fully vested on the date of such amendment or termination. 10. Plan Controls. The terms contained in the Plan are incorporated into and made a part of this Agreement and this Agreement shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall be controlling and determinative. 11. Notice. Notices under this Agreement must be in writing and either personally delivered or sent by registered or certified US mail, return receipt requested, postage prepaid. Notices to the Corporation must be addressed to Movie Gallery, Inc., 900 West Main Street, Dothan, Alabama 36301: Attn: Secretary, or any other address designated by the Corporation in a written notice to Grantee. Notices to Grantee will be directed to the address of Grantee then currently on file with the Corporation, or at any other address given by Grantee in a written notice to the Corporation. EX-10 5 ex104.txt EXHIBIT 10.4 Employee R E S T R I C T E D S T O C K P U R C H A S E A G R E E M E N T Non-transferable GRANT TO ---------------- ("Grantee") by Movie Gallery, Inc. (the "Corporation") of shares of its common stock, $0.001 par value (the "Shares") - --------- pursuant to and subject to the provisions of the Movie Gallery, Inc. 2003 Stock Plan, as amended, and to the terms and conditions set forth on the following page (the "Terms and Conditions"). By accepting the Shares, Grantee shall be deemed to have agreed to the terms and conditions set forth in this Agreement and the Plan. Unless accelerated in accordance with the Plan or in the discretion of the Board, the Shares will vest (become non-forfeitable) in accordance with the following schedule, provided that Grantee is employed by the Corporation or a Parent or Subsidiary as of such applicable date: Percent of Vesting Date Performance Contingency Shares Vested - ---------------------- --------------------------- ------------- Date Audit Committee $10 million in Synergies* 50% certifies achievement achieved by end of FY 2005 of FY 2005 Performance (January 1, 2006) Contingency Date Audit Committee $20 million in Synergies* 100% certifies achievement achieved by end of FY 2006 of FY 2006 Performance (December 31, 2006) Contingency * "Synergies" has the meaning outlined in the May 19, 2005 Memorandum to the Compensation Committee and the May 27, 2005 Compensation Committee Minutes, as further outlined and clarified June 9, 2005 Board Minutes. Achievement of the target levels of Synergies shall be subject to verification and certification by the Audit Committee of the Board. IN WITNESS WHEREOF, Movie Gallery, Inc., acting by and through its duly authorized officers, has caused this Agreement to be executed as of the Grant Date. MOVIE GALLERY, INC. By: -------------------------------------- Accepted by: ----------------------------- Grant Date: ------------------------------ TERMS AND CONDITIONS 1. Grant of Shares. The Corporation hereby grants to the Grantee named on page 1 hereof, subject to the restrictions and the other terms and conditions set forth in the Plan and in this Agreement, the number of shares indicated on page 1 hereof of the Corporation's $0.001 par value common stock (the "Shares"). Capitalized terms used herein and not otherwise defined shall have the meanings assigned to such terms in the Plan. 2. Restrictions. The Shares are subject to each of the following restrictions. "Restricted Shares" mean those Shares that are subject to the restrictions imposed hereunder which restrictions have not then expired or terminated. Restricted Shares may not be sold, transferred, exchanged, assigned, pledged, hypothecated or otherwise encumbered. If Grantee's employment with the Corporation or any Parent or Subsidiary terminates for any reason other than as set forth in paragraph (b) of Section 3 hereof, then Grantee shall forfeit all of Grantee's right, title and interest in and to the Restricted Shares as of the date of employment termination, and such Restricted Shares shall revert to the Corporation immediately following the event of forfeiture. The restrictions imposed under this Section shall apply to all shares of Common Stock or other securities issued with respect to Restricted Shares hereunder in connection with any merger, reorganization, consolidation, recapitalization, stock dividend or other change in corporate structure affecting the Common Stock. 3. Expiration and Termination of Restrictions. The restrictions imposed under Section 2 will expire on the earliest to occur of the following (the period prior to such expiration being referred to herein as the "Restricted Period"): (a) as to the percentages of the Shares specified on page 1 hereof, on the respective dates specified on page 1 hereof; provided the performance contingencies have been achieved and Grantee is then still employed by the Corporation or a Parent or Subsidiary; or (b) as to all of the Shares, the termination of Grantee's employment from the Corporation or a Parent or Subsidiary due to death. 4. Delivery of Shares. The Shares will be registered in the name of Grantee as of the Grant Date and may be held by the Corporation during the Restricted Period in certificated or uncertificated form. If a certificate for Restricted Shares is issued during the Restricted Period, such certificate shall be registered in the name of Grantee and shall bear an appropriate legend reflecting the terms of this Agreement. At the expiration of the Restricted Period, the Corporation shall either, at its discretion, (i) cause a stock certificates for the Shares, without the above legend, to be delivered to Grantee or Grantee's designee, or (ii) deliver the Shares in uncertificated form to a brokerage firm for Grantee's account, without restriction; provided that, in either case, delivery may be postponed for such period as may be required for the Corporation with reasonable diligence to comply, if deemed advisable by the Corporation, with registration requirements under the Securities Act of 1933, listing requirements of any stock exchange, and requirements under any other law or regulation applicable to the issuance or transfer of the Shares. 5. Voting and Dividend Rights. Grantee, as beneficial owner of the Shares, shall have full voting and dividend rights with respect to the Shares during and after the Restricted Period. If Grantee forfeits any rights he may have under this Agreement, Grantee shall no longer have any rights as a stockholder with respect to the Restricted Shares or any interest therein and Grantee shall no longer be entitled to receive dividends on such stock. 6. Changes in Capital Structure. The provisions of the Plan shall apply in the case of a change in the capital structure of the Corporation. 7. No Right of Continued Employment. Nothing in this Agreement shall interfere with or limit in any way the right of the Corporation or any Parent or Subsidiary to terminate Grantee's employment at any time, nor confer upon Grantee any right to continue employment. 8. Payment of Taxes. Grantee will, no later than the date as of which any amount related to the Shares first becomes includable in Grantee's gross income for federal income tax purposes, pay to the Corporation, or make other arrangements satisfactory to the Board or the Committee regarding payment of, any federal, state and local taxes of any kind required by law to be withheld with respect to such amount. The Corporation may, but need not, allow Grantee to satisfy such withholding obligation, in whole or in part, by withholding from the award Shares having a Fair Market Value on the date of withholding equal to the minimum amount (and not any greater amount) required to be withheld for tax purposes. The obligations of the Corporation under this Agreement will be conditional on such payment or arrangements, and the Corporation or its Parent or Subsidiaries will, to the extent permitted by law, have the right to deduct any such taxes from the award or any payment of any kind otherwise due to Grantee. 9. Amendment. The Board of the Committee may amend, modify or terminate this Agreement without approval of Grantee; provided, however, that such amendment, modification or termination shall not, without Grantee's consent, reduce or diminish the value of this award determined as if it had been fully vested on the date of such amendment or termination. 10. Plan Controls. The terms contained in the Plan are incorporated into and made a part of this Agreement and this Agreement shall be governed by and construed in accordance with the Plan. In the event of any actual or alleged conflict between the provisions of the Plan and the provisions of this Agreement, the provisions of the Plan shall be controlling and determinative. 11. Notice. Notices under this Agreement must be in writing and either personally delivered or sent by registered or certified US mail, return receipt requested, postage prepaid. Notices to the Corporation must be addressed to Movie Gallery, Inc., 900 West Main Street, Dothan, Alabama 36301: Attn: Secretary, or any other address designated by the Corporation in a written notice to Grantee. Notices to Grantee will be directed to the address of Grantee then currently on file with the Corporation, or at any other address given by Grantee in a written notice to the Corporation. -----END PRIVACY-ENHANCED MESSAGE-----